He suggested setting up the house with an Accessory Dwelling Unit (ADU) and applying for a conditional use permit.

@Ron Singh,A few things...1) Does your lease say that all lease signers are "jointly and severally liable" for all conditions of the lease?  

He might have lost 30k+ on this but subprime lenders are can take these hits and its expected as part of the market they are in hence the high interest they charge.made a few assumptions but those are the only conditions i can think of on the fly.

Besides that, appraisers typically use a condition code, C1 being new construction, C2 being very updated with little to no deferred maintenance or physical depreciation, and so on.

Be aware many accountants are not familiar with Firpta laws and conditions, so find somebody who did it before, could be expensive, they charge good amount of money to file that.

Comps based on the condition of your property and similar sold homes (make those kitchens pretty!)

It's based on very specific conditions, seller type, market, and other factors that are too involved for this format. 

Too many hypothetical conditions & extraordinary assumptions in them.

However, conditions have intensified greatly throughout 2021 so far.

It was in cash-only condition because of deferred maintenance.